Chapter

SAN MARINO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 23, 1992.
Article XIV
Exchange Arrangement
CurrencyEffective January 1, 1999, San Marino adopted the euro.
Other legal tenderThe monetary agreement between San Marino and Italy, renewed on December 21, 1991, provides for San Marino to issue annually agreed amounts of San Marino lira coins equivalent in form to Italian coinage; these coins are legal tender in both countries. The San Marino gold scudo is also issued, but is legal tender only in San Marino. It is not generally used in transactions because its numismatic value exceeds its defined legal value (Lit 60,000 per 1 scudo).



Negotiations with Italy, on behalf of the EU, regarding conditions under which San Marino may issue euro banknotes and/or coins were begun in late 1999.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderForeign exchange transactions are conducted through commercial banks without restrictions at rates quoted in international markets.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward transactions may be conducted through commercial banks without restriction at rates quoted in international markets.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with foreign countries on foreign accounts are made in convertible currencies or in euro.
Payment arrangementsNo.
Administration of controlThe Central Bank of San Marino (CBSM) may grant foreign exchange dealer status to Sammarinese financial institutions. The Finance and Exchange Agreement with Italy, finalized on July 30, 1999, allows Sammarinese banks to maintain accounts with financial institutions abroad. Previously, Sammarinese banks were allowed to operate on foreign markets only through financial institutions in Italy.



Residents of San Marino are allowed to conduct foreign exchange transactions freely, with settlement effected through authorized Italian intermediaries (the Bank of Italy, the Italian Foreign Exchange Office, authorized banks, and the Postal Administration).
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Laws establish that the CBSM is the sole agency entitled to carry out transactions in gold. The CBSM may authorize other banks or domestic companies to buy gold for production purposes, after ensuring the necessary controls. Currently, there is no gold trade in San Marino.
Controls on external tradeYes.
Controls on exports and imports of banknotesTo combat money laundering, anyone intending to bring into San Marino cash or bearer securities in excess of Lit 30,000,000 is required to carry out the transaction through financial institutions.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedResidents are free to maintain any type of deposit accounts, with the exception of membered accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into domestic currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are free to maintain any type of deposit accounts, with the exception of membered accounts.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresNo license, other than the general business license, is required to engage in trade transactions. Imports from the EU are not subject to restrictions, whereas imports from third countries are subject to control under the relevant EU regulations.
Import taxes and/or tariffsCustoms duties on imports from outside the EU are collected by EU customs authorities on behalf of San Marino. A sales tax is levied on all imports at the time of entry. The structure of this tax corresponds closely to the Italian VAT, but the average effective rate is about 4% lower. Sales taxes levied on imports are rebated when the goods are reexported.
State import monopolyThe importation of electricity, gas, and water is reserved for the public sector.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExports to the EU are not subject to restrictions, while exports to third countries are governed by relevant EU regulations.
Without quotasCustoms clearance formalities concerning the export of arms, works of art, precursor, and dual-use products must be carried out at the customs offices identified by the EC-San Marino Cooperation Committee.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsInward and outward capital transfers, with few exceptions, are not restricted.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsSales are subject to authorization, while issues are not allowed to nonresidents.
Bonds or other debt securities
Sale or issue locally by nonresidentsThe same regulations apply as for the sale and issue of shares or other securities of a participating nature.
On money market instrumentsThe same regulations apply as for the sale and issue of shares or other securities of a participating nature.
On collective investment securitiesThe same regulations apply as for the sale and issue of shares or other securities of a participating nature.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsThe same regulations apply as for the sale and issue of shares or other securities of a participating nature.
Controls on credit operationsThe granting of financial credits of a considerable amount to a person or a company is subject to the Bank Law provisions as well as those of the Office of Banking Supervision.
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentInvestments require government approval, which is based on conformity with long-term developmental and environmental policy considerations. Foreign investors are accorded equal treatment with national firms.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsPurchases by domestic companies and nonresidents require approval from the Council of Twelve. Approval is granted on a case-by-case basis.
Purchase locally by nonresidentsYes.
Controls on personal capital movements
Loans
By residents to nonresidentsExcept for occasional transactions, this activity is not allowed.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)The granting of financial credits of a considerable amount to a person or a company is subject to the Bank Law provisions as well as those of the Office of Banking Supervision.
Lending locally in foreign exchangeThe granting of financial credits of a considerable amount to a person or a company is subject to the Bank Law provisions as well as those of the Office of Banking Supervision.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsBuying of securities of a participating nature exceeding 5% of the Sammarinese bank’s capital must be declared to the Office of Banking Supervision.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 1. San Marino adopted the euro as its currency.
Arrangements for payments and receiptsJuly 30. The Finance and Exchange Agreement with Italy was finalized.

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